Freeport-McMoRan Inc. (FCX) expects to sign a deal with the Indonesian government “imminently” to resolve a dispute that has curbed production at the world’s third-biggest copper mine.
The largest publicly traded copper producer and the government have developed a memorandum of understanding under which the company would commit to help develop a smelter, Phoenix-based Freeport said today in a statement. The agreement includes reduced export taxes and higher royalties for copper and gold.
The agreement, which would enable the immediate resumption of exports, also states that Freeport and Indonesia would start negotiations immediately on changes to the company’s contract to operate in the country.
Freeport reduced operating levels this year at its Grasberg copper and gold mine after Indonesia introduced restrictions and duties on mineral exports in a bid to increase local processing. Exports of concentrates, a semi-processed raw material, have yet to resume after months of negotiations between the company and government officials.
Freeport has been able to run Grasberg at about half of normal rates because it sends some concentrate to a domestic smelter it helped build in the 1990s. Continue Reading →